What happens when a divorcing spouse actively misrepresents his or her income in the context of a child support or alimony analysis or tries to hide assets?

By Carlos A. Maycotte of Fitch Law Partners LLP posted in Divorce & Family Law on Thursday, January 24, 2019.

A recent Appeals Court case addressed that issue, affirming the trial court's judgment that found that the husband's misrepresentations about his income were egregious enough that the trial judge's use of discretion to attribute and impute income to the husband was appropriate, and that the assets that he had tried to divert were subject to equitable division.

In Dilanian v. Dilanian, the Husband appealed from a judgment issued by the trial court, taking issue with the division of certain assets and the imposition of support payments. The Husband was the sole owner of his company, and during the divorce cut his income almost in half (the company's liquid accounts grew correspondingly). He also established a defined benefit plan that he claimed was established for both his and his father's benefit (rather than just for his own benefit). However, documents showed that the plan was not actually established until after his father's death. These are but two of the husband's most questionable financial maneuvers.

The trial court, as might be expected, did not look too kindly into the husband's shenanigans. The judge attributed income to Husband after finding that he had artificially lowered his income. The judge also did not credit the husband's claims that the father was a participant in the defined benefit plan, and ordered a disproportionate division of that asset that benefitted the Wife, while at the same time dividing some of the other assets disproportionately (again, with benefit to the wife) and a further buy-out for his interest in the company.

The appeals court supported all of these findings and reiterated that the trial judge has broad discretion in determining the equities of a dispute. Artificially depressing one's income and engaging in surreptitious financial maneuvers to obfuscate the nature of certain assets are the sort of decisions that a Court will frown upon. Given the broad latitude of a probate and family court judge to issue equitable judgments, those decisions are also ill-advised.